M v T [2005] NSWSC 303

New South Wales Supreme Court

CITATION : M v T [2005] NSWSC 303

HEARING DATE(S) : 7 March 2005

JUDGMENT DATE : 7 March 2005

Equity Division JURISDICTION : Protective List

JUDGMENT OF : Windeyer J at 1

DECISION : Declarations and orders made in accordance with summons.

CATCHWORDS : MENTAL HEALTH - protected persons - managers - appointment of management of estate to trustee company - matters for consideration - concern about level of fees charged against estate

Protected Estates Act 1983, s13 LEGISLATION CITED : Trustee (Companies) Act 1964

M (Plaintiff) PARTIES : T (Defendant)

FILE NUMBER(S) : SC P04 of 2005

Mr P W Neil SC (Plaintiff) COUNSEL : No appearance

Stacks/Goudkamp (Plaintiff) SOLICITORS : No appearance

LOWER COURT JURISDICTION :

- 1 - IN THE SUPREME COURT OF NEW SOUTH WALES EQUITY DIVISION PROTECTIVE LIST

WINDEYER J

MONDAY 7 MARCH 2005

P4/05

JUDGMENT

1 HIS HONOUR: This is a matter which I asked to be transferred into court after it had been referred to me to be dealt with in chambers. Applications for management orders under the Protected Estates Act 1983 are dealt with by the judge in charge of the protective list in chambers if the Deputy Registrar, who considers the matter in the first instance, considers that all is in order for the making of the declaration under s13 of the Protected Estates Act followed by the making of a management order. 2 In this case there were two matters which concerned me. The first was that it seemed to me when I was considering the matter that the proposed manager, namely, Australian Executors Trustee Company Limited was not a trustee company within the meaning of the Trustee (Companies) Act 1964. There has now been evidence filed that this trustee company is the same as Tower Trust Limited. Tower Trust Limited has changed its name to Australian Executors Trustee Company Limited. Tower was a statutory trustee company under the New South Wales Act and would remain so after its change of name. Thus, the first difficulty to which I have referred has been overcome. 3 The second problem which I raised was the fees structure. On the evidence then filed it was clearly stated, at least in a second affidavit of the applicant, that the fees proposed to be charged by the proposed trustee, having regard to the fees which would be charged by the fund manager proposed to be engaged, would be substantial, and, on their face, would be higher than the fees that would be charged, for instance, by the Protective Commissioner in this State, and within the knowledge of the court, higher than the fees charged by some other trustee companies in New South Wales. That is not necessarily a reason why the appointment sought should not be made, but it is at least something which should be taken into account if the difference seems to be of any magnitude. 4 In this case the first year fees of the proposed trustee company when added to the fees proposed to be charged by the investment manager will be in the order of $12,000 more than would be expected to be charged by the Office of the Protective Commissioner for the same period and the subsequent yearly fees would be in the order of $14,000 more than the fee which would be expected to be charged by the Protective Commissioner. There are always doubts about these fee structures whether charged by a private trustee company or by the Protective Commissioner and comparison is difficult. Nevertheless, it is clear from this proposal that the amount charged will be significantly greater over the expected life of this management. 5 Like all managed investments, management fees are charged on the capital of the fund whether or not the capital is increasing or decreasing. It is always put that there is an incentive for the trustee and manager to increase the value of the fund because that increases their earnings. While that is true, the simple fact is that their earnings are very substantial whether or not in a particular year the fund under management has gone down rather than gone up. That, however, is something that at the present moment is beyond the control of the court and the court accepts that the same problem applies to the schedule of fees charged to the estate by the Protective Office. 6 In this matter, as the plaintiff and the members of the family who are involved with the defendant clearly wish that Australian Executor Trustees Limited be appointed as manager, I propose to make that order, as I do not think that the countervailing matters as to fees mean that the court ought not to make the order in favour of an authorised manager whom the family wish to have control of the fund. 7 I make the declaration in paragraph 1 of the summons. I make orders in paragraphs 2 and 3 of the summons. I make the order in paragraph 4 of the summons omitting the words "and of the defendant" in the fourth line. I make orders in paragraph 5. I make the order in paragraph 6 omitting the words "and of the defendant". 8 As this is a protective matter, the court indicates, I hope, in more simple language, the reasons for the orders made and why this matter was brought into court. We are concerned only for the welfare of the person whose estate is to be brought under management. We are not concerned about anything else. All we are concerned about is making an order that will be for the benefit of that person, and that is why these matters are dealt with carefully. It is necessary for the court to take a close interest in what is proposed, to make sure that it is going to be for the benefit of the person affected. That is why the matter was brought into court today.